Many in the property and development sectors in NSW welcomed the introduction of the Part 3A (Major Infrastructure and other projects) reforms in August 2005. The NSW legislation is geared towards facilitating large-scale developments and infrastructure developments, and to reducing the extent to which those projects can be delayed or prevented by local councils and others who might oppose those developments. Meanwhile, local government representatives, environmentalists and community groups have criticised the new provisions. This update looks at whether Part 3A is, in practice, really so advantageous to developers.
Now that the dust has begun to settle, developers need to look long and hard at the implications of Part 3A, and question whether it provides the "certainty" and "bankable security" that were said to be the primary goals of the legislation. In their rush to herald the amending legislation, there are issues that developers might have overlooked.
One issue in particular is the changes to appeal processes.
Proponent Appeal Rights
Section 75K(1) of the Environmental Planning and Assessment Act (EP&A Act) provides that appeals by proponents of a project who are dissatisfied with the decision of the Minister in relation to a Part 3A Project Approval or Concept Plan Approval exist only if:
- the project is not a critical infrastructure project;
- the proponent is not a public authority;
- the project has not been the subject of a commission of inquiry or a report of a panel of experts under s.75G; and
- (but for Part 3A), the provisions of Part 4 of the EP&A Act would apply.
Importantly, there are absolutely no appeal rights for a proponent in relation to critical infrastructure projects. Presumably applications that are categorised as "critical infrastructure" will be highly uncommon. At present only the proposed desalination plant at Kurnell, lodged by Sydney Water Corporation, falls within this category. Nevertheless, in those rare circumstances, applicants would need to consider the fact that if their applications were refused, there is no right of review of the Minister’s decision.
Furthermore, appeal rights are automatically lost where the application has been the subject of a commission of inquiry or a report of a panel of experts under s.75G of the EP&A Act.
Notably, under s. 75G, the Minister may at his absolute discretion convene a Panel of Experts. It is feasible that the Minister may, as a matter of practice and policy, automatically call for a report from a Panel of Experts on all Part 3A applications. This will have the effect of eliminating all merit appeals on Major Projects.
The Panel may be required to report only on a small range of issues or even on one issue only. But the consequence is that the report on that one issue is sufficient to replace entirely the applicant’s appeal rights on all issues. Moreover, only one expert is required to comprise a "Panel". Therefore, an "Expert Panel Report" may simply be a report by one expert on one particular issue. It nevertheless entirely replaces appeal rights.
A further issue is that there is no right of appeal once a report has been prepared. Therefore there is no opportunity for the accuracy of the report to be tested (ie, by evidence in reply, cross examination or otherwise). Although the coming into existence of an Expert Panel Report has the effect that the proponent loses all appeal rights, there is actually no requirement anywhere in the EP&A Act or the Regulations that the Minister must be bound by the Expert Report. The Panels are purely advisory. It is simply a matter for the Minister’s consideration pursuant to s.75J of the EP&A Act.
Objector Appeal Rights – Project Approvals
Generally, under s.75L of the EP&A Act, the same limitations apply, so that objectors may no longer appeal once there has been an Expert Panel Report or Public Inquiry, or if the development is classed as a "critical infrastructure project". Therefore many of the comments above are equally relevant in relation to objector appeal rights.
In the limited circumstances where third party appeals rights are available, those appeals can only be brought in relation to a Project Approval by objectors who have previously made a submission to an application for approval during the period in which the environmental assessment report is exhibited (s.75L(2) of the EP&A Act).
In addition, third party appeal rights only apply in circumstances where the development would previously have been classified as designated development.
Objector Appeal Rights – Concept Plan Approvals
Further limiting objector appeal rights, s. 75L(b) of the EP&A Act prevents objectors from lodging an appeal where the Minister has issued a Concept Approval (described below). This restriction would apply in relation to the application for Concept Approval itself, and in any subsequent development applications having the benefit of the original Concept Plan Approval.
The fact that applicants have appeal rights in respect of Concept Plan applications, whereas objectors do not, may prove a strong incentive to developers to seek Concept Plan approvals as a matter of routine.
The Concept Plan outlines the scope of the project and any development options and sets out any plan for the proposed staged implementation of the project. However, a detailed description of the project is specifically not required (s.75M(2) of the EP&A Act).
A concept approval would be advantageous where there are several routes, alternative sites or configurations available that need to be considered at an early stage so as to determine the most acceptable proposal.
Where approval to a Concept Plan is granted, there is no right of appeal for objectors (s.75L of the EP&A Act). That is so even where the development would have otherwise been classified as designated development, and would have therefore ordinarily carried third party appeal rights.
Therefore, given the certainty a concept approval provides, and the flexibility it appears to allow, it has significant advantages for developers and the Government in public/private partnerships in marketing the proposal to financial lenders or the private sector.
Fast-Tracking The Exhibition Process
During the Second Reading Speech, Planning Minister Craig Knowles made it plain that in terms of public participation, the process envisaged by the legislation would essentially be as follows:
- Exhibition of the application and environmental assessments;
- Submissions received will be sent to the applicant to respond to;
- The proponent may then amend the application;
- The Minister will then consult with other relevant government agencies and determine the application.
What is noticeable is that the applicant may amend the application after the exhibition period, without the need for re-exhibition of that amended application. Clearly this is advantageous to applicants as it will save time, and will eliminate formal public comment in relation to an amended application. In short, it gives the applicant a full right of final reply to all submissions received in relation to the application. Importantly, contentious aspects of proposals may be deliberately and strategically withheld by applicants, and then incorporated into the proposal as an amendment after the exhibition period closes. That would avoid public scrutiny and criticism of those amended aspects of a proposal.
The introduction of Part 3A into the EP&A Act was immediately and loudly praised by developers and property industry groups, as it promised to simplify the process of obtaining approvals, and increase certainty by minimising the ability of councils and objectors to delay or obstruct the approval process. The NSW Government hopes that this increased certainty will increase private sector investment in property and infrastructure projects.
On deeper reflection, however, it appears that the amending legislation potentially deprives applicants and objectors alike of a number of fundamental and entrenched rights, particularly in relation to appeal processes.
Arguably, the ability of the Minister to easily, routinely and unilaterally deprive applicants (and objectors) of all merit appeal rights on all Major Project applications, will result in less certainty for applicants. Unless the strong likelihood of ministerial support for a project is known upfront, the only certainty is that if the Minister refuses the application, that may well be the end of the matter, without any opportunity for merit review.
By Anthony Whealy, Sydney
t (02) 9931 4867
t (02) 9931 4929
This publication is provided to clients and correspondents for their information on a complimentary basis. It represents a brief summary of the law applicable as at the date of publication and should not be relied on as a definitive or complete statement of the relevant laws.